February 6, 2019 | Synovus Financial Corporation | SNV

Investors were not happy with a recent move this company made, but it should pay off in the long run.

A Larger Area

Synovus Financial Corporation (SNV), which operates Synovus Bank locations in Georgia, Alabama, South Carolina and Tennessee, announced last year that it was buying Florida Community Bank, a 51-branch bank created after the 2008 financial crisis. Synovus, which has been in business since 1888, said it expected cost savings and operating synergies from the acquisition, but such purchases were not viewed favorably by investors in 2018, and some had concerns about possible credit issues at Florida Community. The result was negative investor response to the deal and pressure on Synovus stock.

The acquisition should be good for Synovus over time. It makes Florida the company’s second-biggest market after Georgia and gives Synovus a total of about 300 branches and an even stronger regional foothold.

Earnings growth should accelerate as revenue continues rising. Revenue was $1.3 billion in 2017 and likely will be reported as $1.4 billion for 2018 and $1.9 billion this year. And the dividend of $1.20/share/yr., recently yielding 3.3%, appears secure.

About Stock of the Week

About Harry Berkowitz

Harry Berkowitz is personal finance editor of Bottom Line Personal, which puts him in charge of articles on topics ranging from investing and saving to credit cards, home buying, insurance and Social Security. He is also editor of the online "Stock of the Week", which highlights attractive stocks based on analysis by top investment experts. Harry's journalism experience covers four decades, including 20 years writing on financial matters at the daily newspaper Newsday as well as stints as the business editor at the Courier News in New Jersey and the Stamford Advocate in Connecticut. He is a graduate of New York University.

Blogs

About Us

For over four decades, we’ve brought you the best in wellness and wealth advice from our family of experts. Isn’t it time that you get “inside” America’s trusted source? bottomlineinc.com brings you useful, expert, actionable information to help you navigate your world, saving time and money along the way. Bottom Line… empowering your life with expert advice!

Bottom Line, Inc. publishes the opinions of expert authorities in many fields These opinions are for educational and illustrative purposes only and should not be considered as either individual advice or as a substitute for legal, accounting, investment, medical and other professional services intended to suit your specific personal needs. Always consult a competent professional for answers specific to your questions and circumstances. Our content is further subject to our Terms and Conditions

February 6, 2019 | Synovus Financial Corporation | SNV

Investors were not happy with a recent move this company made, but it should pay off in the long run.

A Larger Area

Synovus Financial Corporation (SNV), which operates Synovus Bank locations in Georgia, Alabama, South Carolina and Tennessee, announced last year that it was buying Florida Community Bank, a 51-branch bank created after the 2008 financial crisis. Synovus, which has been in business since 1888, said it expected cost savings and operating synergies from the acquisition, but such purchases were not viewed favorably by investors in 2018, and some had concerns about possible credit issues at Florida Community. The result was negative investor response to the deal and pressure on Synovus stock.

The acquisition should be good for Synovus over time. It makes Florida the company’s second-biggest market after Georgia and gives Synovus a total of about 300 branches and an even stronger regional foothold.

Earnings growth should accelerate as revenue continues rising. Revenue was $1.3 billion in 2017 and likely will be reported as $1.4 billion for 2018 and $1.9 billion this year. And the dividend of $1.20/share/yr., recently yielding 3.3%, appears secure.